Contract disputes are threatening to further delay Muni’s $1.6 billion Central Subway project, potentially pushing it past its targeted opening date of December 2019 into mid-2020, or beyond.
That’s the warning from the project’s independent monitor, known as a Project Management Oversight Contractor, in a March 5 report to the federal government.
The oversight contractor warned that ongoing contract disputes between the San Francisco Municipal Transportation Agency and the Central Subway construction contractor, Tutor Perini Corporation, threaten the project’s schedule and budget.
“We are still targeting December 2019, though there remains risk to meeting that timeline,” said Paul Rose, an SFMTA spokesperson. “There will continue to be fluctuations in the schedule predictions as we near the end of the project, but we plan to address issues as they arise to keep us as close to the target as possible.”
The Central Subway Project may one day soon whisk riders from the South of Market to the heart of Chinatown, but was originally set to open in December 2018. That date slipped after construction delays in Chinatown, as well as an incident where a contractor laid 3.2 miles of the wrong type of steel track, as reported by the San Francisco Examiner last year.
Now slated to launch in December 2019, the project could get pushed back beyond May 2020 if ongoing issues are not resolved, the oversight contractor warned.
The project’s contractor Tutor Perini has a somewhat notorious reputation in California, with its CEO Ron Tutor having earned the nickname the “Change-Order Artist” from the late Los Angeles Mayor Tom Bradley for his company’s many contract change notes, which are known to balloon project costs.
City Attorney Dennis Herrera sued Tutor Perini in 2002 over such change orders in connection with a contract at the San Francisco International Airport.
Tutor Perini did not respond to requests for comment.
It’s those same change orders that the oversight contractor identified as potentially causing the Central Subway’s newest delay.
When the oversight contractor visited the Central Subway Project in February, its inspectors found “limited construction activities” and “only” 30 workers in the Chinatown Station. The oversight contactor wrote “this indicates that (Tutor Perini) is not progressing the work as scheduled,” and could be one method of applying pressure on SFMTA in their dispute.
“It is the (oversight contractor’s) opinion, if SFMTA does not resolve the challenging relationship issues with (Tutor Perini) by the first quarter of 2019, the RSD (Revenue Service Date) may go beyond the current proposed (federal) extension date of May 26, 2020,” the oversight contractor wrote.
Director of Transportation Ed Reiskin, who heads the SFMTA, told the San Francisco Examiner on Tuesday that though Tutor Perini did employ limited staff in December and January, “I think it’s come back” in terms of staffing.
Pushing back against Tutor Perini is an uphill battle, some advocates said.
Elizabeth Alexis, co-founder of the advocacy group Californians Advocating Responsible Rail Design, calls herself a “Ron-Tutor-ologist,” having spent years researching the business practices of Tutor Perini. Compared to other cities, San Francisco actually seems to be faring well against the construction giant, she told the San Francisco Examiner.
“In this case SFMTA’s been trying very hard to keep Tutor in line,” Alexis said.
The effort to keep the Central Subway on track for its December 2019 debut has even played out publicly, though quietly. In February, the SFMTA Board of Directors partially terminated a contract with Tutor Perini to install trackway systems installation and train computer-control systems.
In a written report, SFMTA staff argued that wresting that contract away from Tutor Perini was necessary because “on-going schedule and design coordination challenges” between SFMTA and Tutor Perini “have impeded progress on (train control system) designs and exposed the project to potential risk of not meeting the target revenue service schedule.”
In short, leaving the contract with Tutor Perini threatened to delay the Central Subway Project. Losing that contract cost Tutor Perini $18 million from an $839.6 million contract.
When asked if the intent behind terminating Tutor Perini’s train control systems contract was to speed up completion of the Central Subway Project, Reiskin answered, “that’s the intent.”
For Ron Tutor, all that pushback means “he’s in trouble in this project,” Alexis said, because SFMTA “actually ran fairly tight change order controls. They didn’t just cut him checks.”
While that may mean Tutor Perini isn’t running the project over-budget, yet, that danger still looms, the oversight contractor warned in its report. SFMTA is quickly nearing the end of its “contingency” budget, which is a budget specifically set aside to take care of delays and unforeseen problems.
“Although SFMTA’s estimate of total cost exposure from claims has been reduced, the large increase in claims in recent months continues to be a concern,” the oversight contractor wrote. “Claims and pending/potential contract changes now have a maximum potential impact that is approaching the value of the remaining contingency in the project budget.”
And if the contingency budget runs out, it will be San Franciscans footing the bill.